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9-month report
BAWAG P.S.K. CONTINUES TO DELIVER STRONG RESULTS: EUR 320 MILLION NET PROFIT FOR
FIRST THREE QUARTERS 2015, +22%
o Net profit EUR 320 million, +22% versus prior year
o Return on equity of 16.9%, +1.0pt
o Core revenues EUR 684 million, +6%
o Operating expenses down 8% to EUR 337 million
o Cost-income ratio improved to 46.7%, down 4.6pts
o Net interest margin up 28bps to 2.13%
o Fully loaded CET1 ratio of 14.9%, up 2.8pts versus year-end 2014
o Fully loaded total capital ratio of 17.9%, up 2.1pts versus year-end
2014
VIENNA, Austria - November 10, 2015 - BAWAG P.S.K. today reported a net profit
of EUR 320 million for the first three quarters 2015, up 22% versus prior year.
The increase was driven by higher net interest income, reduced operating
expenses and lower risk costs. Annualized return on equity was 16.9%, up 1pt.
Net interest margin improved 28bps to 2.13%. Operating expenses were down 8% and
cost-income ratio down 4.6pts to 46.7%. Risk costs decreased by 40% with no
impairments in the first three quarters 2015.
"Our strong results in the first three quarters reiterate that BAWAG P.S.K. is
well prepared to succeed in a competitive European banking landscape. Because of
our efforts over the past few years, we are in a very good position enabling us
to play offense both organically and inorganically. We are proud of our
accomplishments, positioning BAWAG P.S.K. among the best-performing banks in
Europe" said Chief Executive Officer Byron Haynes.
"On the back of another strong quarterly performance we will continue to execute
on a variety of operational and strategic initiatives during the fourth quarter
and running into 2016. Our focus continues to be on driving efficiency,
operational excellence and profitable growth well into the future" said Chief
Financial Officer Anas Abuzaakouk.
Strong capital ratios on a fully loaded basis
The management team continues to run the Bank on a fully loaded basis from a
capital standpoint. The Bank's fully loaded CET1 ratio further improved to 14.9%
(Dec 2014: 12.1%) and the total capital ratio to 17.9% (Dec 2014: 15.8%) as of
30 September 2015. On a transitional basis, these ratios were 15.8% and 18.7%,
respectively. At the same time we maintained a RWA density of 48%, a
conservative ratio relative to other
European peers.
Closed the acquisition of former Volksbanken Leasing
Having a strong capital base enabled BAWAG P.S.K. to make a strategic
acquisition of the former Volksbanken Leasing business, closing on October 5,
2015. This transaction enables BAWAG P.S.K. to obtain a stronger market position
in the Austrian retail leasing business and to provide floor plan financing
capabilities creating a strategic advantage for auto dealer relationships.
Combined with easybank's existing auto leasing entity, BAWAG P.S.K. will become
the #3 auto lessor in Austria with a market share of approximately 11%.
Key business highlights in the first three quarters 2015
We continued to deliver strong results in the first three quarters, positioning
us among the best-performing European banks.
Core revenues increased by 6% to EUR 684 million driven by strength in net
interest income. Despite the continued low-interest rate environment, net
interest income increased by 9% in the first three quarters 2015 versus the same
period in 2014, driven primarily by lower funding costs and stable interest
income. Net interest margin improved by 28bps to 2.13%, reflecting the Bank's
dedicated focus on asset and liability pricing.
Operating expenses decreased by 8% to EUR 337 million, driven by sustainable
long-term measures in personnel and non-personnel expenses. The cost-income
ratio improved by 4.6 points to 46.7%.
Total risk costs decreased by 40% to EUR 31 million in the first three quarters
2015, resulting from the improved overall credit quality of the core businesses.
The Bank maintained a conservative risk profile with disciplined risk-adjusted
underwriting standards and a focus on stable and economically sound geographies.
The risk cost ratio was 16bps and the NPL ratio improved to 2.2% (down 1pt
versus previous year). There
were no impairments in the first three quarters 2015, reiterating the low risk
nature of our business.
Net profit increased by EUR 57 million, or 22%, to EUR 320 million in the first
three quarters 2015. The increase was driven by improvements in Corporate
Lending and Investments, with net profit up 34%. Net profit in Retail Banking
and Small Business was up 14%, driven by greater operating efficiency. Overall,
the net profit of the Bank was driven by higher net interest income, reduced
operating expenses and lower risk costs, reflecting the continued high quality
of earnings.
Loans and receivables with customers increased by EUR 265 million, or 1%, to EUR
22 billion at the end of September 2015, primarily driven by growth in the
Retail Banking and Small Business segment. The total new origination volume in
the first three quarters of 2015 was EUR 3.4 billion, reflecting positive growth
in both our retail and international businesses. The overall customer loan book
remained heavily weighed to our domestic market with over 70% of customer loans
in Austria. At the same time, BAWAG P.S.K. continued to reduce its non-core
legacy loan assets from CEE countries. The remaining loan exposure to CEE
countries is now below 0.6% of total assets.
Segment reporting
Retail Banking and Small Business showed strong results in the first three
quarters 2015 by continuing to grow its consumer loan franchise in absolute
terms while also capturing market share. Overall, the segment achieved a EUR 142
million net profit, a 14% increase compared to the same period in 2014, driven
by reduced operating expenses and lower risk costs. The continued efficiency
improvements resulted in an 11% decrease in operating expenses versus prior
year. The segment's cost-income ratio further improved to 59%, representing a
5pts decrease from the previous year.
Despite a slow growth market, BAWAG P.S.K. was able to increase its consumer
lending market share to 10%, up 1pt since year-end 2014 and 0.3pts since June
2015.
Total new business loan origination in the first three quarters 2015 was EUR 840
million. Retail assets stood at EUR 9.7 billion at the end of the third quarter
2015, up 1% compared to December 2014. This growth reflects the continued
increase in our consumer and housing loans.
We maintained our disciplined underwriting and pricing standards, which were
reflected in our stable margins and low risk costs. Overall funding costs also
continued to decrease as we optimized product mix, volume and pricing. At the
end of September 2015 we reported a blended interest rate on our retail deposits
of 0.35%, down 15bps since the beginning of the year.
The direct banking subsidiary easybank's client base grew to 545,000 accounts in
the first three quarters 2015, up 8% since year-end 2014. Deposits grew by 13%
to EUR 3.1 billion from September 2014. With the recent integration of the BAWAG
P.S.K. auto leasing business and now the acquisition of the former Volksbanken
Leasing business, easybank is well positioned to boost its asset origination
capabilities going forward. easybank also entered into a new strategic
partnership with "Unsere Wasserkraft" ("easy green energy") which provides
easybank with yet another opportunity to expand its market presence, brand
awareness and best-in-class service offering to new segments and customers.
Corporate Lending and Investments contributed EUR 143 million to the Bank's net
profit in the first three quarters 2015 compared to EUR 107 million in the same
period last year. This 34% increase was mainly driven by higher core revenues
and lower risk costs. Core revenues were up 16% driven by higher net interest
income due to continued deleveraging of non-core assets and reallocation of
capital into more profitable and capital-efficient assets. Low risk costs of EUR
4 million (EUR 21 million in the first three quarters 2014) and an NPL ratio of
0.7% (down 1.2 points from September 2014) reflect positive impacts from our
de-risking actions and the overall high credit quality of the assets.
Despite muted overall demand, flat domestic output and lower corporate
investment the Austrian corporate business generated (in addition to normal
renewals) a new business volume of EUR 300 million in the first three quarters
2015.
The international business continued to see strength with loan originations of
EUR 2.6 billion in the first three quarters. The focus remained on stronger
Western European countries (Germany, UK and France) and the United States.
Treasury Services and Markets reported core revenues up 7% and operating
expenses down 9% due to increased operating efficiency. Selective new
investments and strategic sales supported a decrease of risk-weighted assets by
18% in the first three quarters 2015. The investment strategy continues to focus
on investment grade securities predominantly representing unsecured and secured
bonds of financial institutions in core Europe and the United States in order to
maintain solid diversification. The portfolio of CLO investments was disposed of
in the third quarter 2015 based on evaluation of alternative investments and
overall portfolio management.
About BAWAG P.S.K.
BAWAG P.S.K. is one of Austria's largest banking institutions with 1.6 million
customers and a well-recognized national brand. The Bank focuses on three
business segments: Retail Banking and Small Business offers simple, fair and
transparent products and services which include lending, savings, payment, card,
investment and insurance services for private and small business customers.
These products and services are available through our branches all over Austria
which are complemented by our digital sales channels and 100% owned direct bank
easybank. Austrian corporate businesses as well as international activities are
managed within the Corporate Lending and Investments segment. The majority of
the Bank's lending activities are within Austria. The international business is
focused on corporate, commercial real estate and portfolio financing
transactions primarily in Western Europe and the United States of America.
Treasury Services and Markets includes all activities associated with providing
hedging and investment services for the Group's treasury activities and the
management of the Bank's portfolio of financial securities.
BAWAG P.S.K. focuses on a capital efficient, low risk and low leverage business
model while targeting to be one of the most efficient, centrally managed banks
across Europe. Delivering simple, transparent and best-in-class products and
services to our customers is the core of our strategy.
BAWAG P.S.K.'s Investor Relations website
https://www.bawagpsk.com/BAWAGPSK/IR/EN contains further information about the
Bank, including financial and other information for investors.
For charts please refer to the attached PDF-press release.
BAWAG P.S.K. contact:
Financial Community:
Benjamin del Fabro (Investor Relations)
Tel: +43 (0) 5 99 05-22456
E-mail: investor.relations@bawagpsk.com
Attachments with Announcement:
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Further inquiry note:
Pressestelle
T: 43 (0)59905 - 31210
F: 43 (0)59905 - 22007
e-mail: presse@bawagpsk.com
end of announcement euro adhoc
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Attachments with Announcement:
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http://resources.euroadhoc.com/us/IELT53mZ
company: BAWAG P.S.K. Bank für Arbeit und Wirtschaft und Österreichische Postsparkasse Aktiengesellschaft
Georg-Coch-Platz 2
A-1018 Wien
phone: +43 (0) 59905
mail: bawagpsk@bawagpsk.com
WWW: www.bawagpsk.com
sector: Banking
ISIN: -
indexes:
stockmarkets: stock market: Luxembourg Stock Exchange, Euronext Amsterdam,
Frankfurt, Wien, SIX Swiss Exchange
language: English